Consumers Crave Fast Food With Conscience: But What’s The Business Model?

This story was written by Natalie Bettendorf and produced by Youth Radio as part of the series Fast Food Scramble with NPR’s Sonari Glinton. The original article can be found here.

We’re facing a kind of food revolution, and my generation is driving it.

Not so long ago, when fast food giants reigned supreme, takeout meant cheap, quick, greasy meals. But a recent Goldman Sachs report says people under 35 want meals that are fresh, healthy and adventurous, as well as fast. Bad news for your typical burger joint, good news for food entrepreneurs like Charley Wang.

“We don’t want something that everyone and anyone can have,” Wang says. “We want something that has soul, that has personalization to it.”

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Wang is co-founder of a startup called Josephine. You can use the company’s website to buy home cooked meals from your neighbors, no drive through required. And from the perspective of their contractors, the chefs, it’s a quick entry into what’s becoming known as the “on-demand” food marketplace. All you need is Internet access, and a kitchen.

One of those home cooks is Renee McGhee. On this particular day in Berkeley, California, McGhee is stirring a giant pot of bean soup, and scooping thick globs of cornbread batter into oversized muffin tins.

“You don’t want to mix it too much,” McGhee said. “The lumps will bake out and it will be just fine.”

Cooks for Josephine hand over ten percent of their revenue to the company in exchange for the use of their online ordering platform and marketing materials. It’s kinda like Uber, McGhee says, but with kitchens instead of cars. And like Uber, Josephine is bringing some surprising players into the market.

A few miles away at Willard Middle School in Berkeley, you’ll see teachers preparing giant piles of vegetables from the school garden to be chopped by 12- and 13-year-olds. The school is in its second year of partnering with Josephine.com to make and sell hundreds meals every month — with some adult supervision.

The partnership is a win-win. Josephine gets the kind of community credibility consumers want. The school gets a cool learning opportunity and a much-needed source of ongoing funding. But there are plenty of hurdles. Thirteen-year-old Willard student Fae Rauber remembers their first massive meal attempt for Josephine.

“We had rice we were making, and it all didn’t work,” she said. “So we had to go and buy rice, like half an hour before people started coming.”

Despite mishaps like the “rice incident,” last school year Josephine’s partnership brought Willard Middle more than 30 thousand dollars in revenue and accounted for 25 percent of Josephine’s new customers. But like other companies that are part of the so-called “sharing economy,” Josephine’s business model has put it at odds with industry regulators. Last month, the city of Berkeley’s Environmental Health Division sent several Josephine cooks cease and desist orders for selling meals from their homes without a permit.

“The issue really is about food safety and being able to inspect how food is prepared,” said Matthai Chakko, a spokesperson for the city of Berkeley. He says it’s not safe to buy food made in home kitchens because they aren’t inspected, and usually don’t have the equipment you need to make food safely in mass quantities.

The cease and desist orders have halted business for many of the company’s sellers, including Renee McGhee.

“You realize right away, I’ve broken the law, [but] while I was doing it, didn’t feel like that. It feels like I’m doing what I love,” McGhee said. “People were happy and pleased to come here and get their meals and I think that’s their right.”

But actually delivering on what makes consumers happy — it’s something the whole on-demand food industry is still figuring out. With pioneers like SpoonRocket closing and other companies turning to monthly membership fees, it seems that businesses are still working on getting the recipe right.

For now, Josephine is still up and running — some of their chefs, like the kids at Willard Middle School, have access to commercial grade kitchens that have the necessary permits. And the company says it’s pushing to change California’s law around who can make and sell food.